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When a popular stock group takes a pounding in the market, some mutual funds are bound to suffer, too. The $1.2 billion-in-assets Kemper Growth Fund is a good example.
The fund's record-breaking 66.85% return in 1991 brought in $225 million in new money in 1992. But this year has been a disappointment to many of the fund's investors, who probably wish they had kept their money in certificates of deposit. The fund was down almost 7% through March, compared with -2.52% for the S&P 500 and -1.76% for the Lipper growth fund index.
This is not the fund's first bout with adversity. Kemper Growth underperformed the S&P 500 in five of six years from 1984 through 1989, and lagged the Lipper growth fund index for four years in the same period.
Efforts to cope with the whipsawing suffered in Wall Street's on-again, off-again romance with growth stocks has led Kemper to centralize the management of its funds' stock-picking process.
The man in charge is Stephen Timbers, a former money manager at Chemical Bank in New York City whom Kemper brought in in 1987 to shake things up. As chief investment officer for all of Kemper's 33 mutual funds, Timbers, 47, over the past four years has shuffled and reshuffled his fund managers.
Kemper Growth's present comanager team of Michael Arends and Stephen Lewis, for example, is the third set of managers to run the fund in three years. They took over from Ron Ognar last June, when Ognar left Kemper to join Rosenberg Capital Management in San Francisco. Most of Kemper's other equity funds have had fresh managers since Timbers took over. But as is the case at other Kemper funds, Arends and Lewis do not enjoy the autonomy of the typical portfolio manager. Most important, they must put 80% of their money into stocks on a core list of 75 companies chosen by an investment committee made up of Timbers and his fund managers. Given the funds' need to hold many stocks for diversity's sake, Timbers is, in effect, the key decision maker. Since he took over, Kemper Growth's relatively...